News

Reimbursements but no 'bonus' for Team San Jose

By John Woolfolk and Tracy Seipel Mercury News Staff

Posted:
02/12/2013 08:53:32 PM PST

Updated:
02/12/2013 09:18:39 PM PST

SAN JOSE -- Team San Jose, the nonprofit that manages San Jose's McEnery Convention Center and downtown theaters, won't get its $350,000 bonus after all because it didn't meet one of its performance goals.

But in a creative compromise, the City Council agreed Tuesday to give the agency the same amount of money anyway.

It will come in the form of reimbursements for expenses linked to the expansion of the Convention Center -- a payment that some critics call just a backdoor bonus that the group didn't qualify for.

After a contentious debate, the council voted 9 to 2 for the plan, with Councilmen Xavier Campos and Ash Kalra opposed. The council accepted that solution proposed late last week by Councilmen Pete Constant and Sam Liccardo. The city manager's office must still review the specific items for reimbursement and return to the council with that list.

The 2011-12 fiscal year audit of the nonprofit showed the group -- a coalition of local hotels, arts, business and labor groups -- had achieved all of its goals except one: For the second year in a row, it fell short of meeting the number of theater performances it booked in its seven venues. Instead of the agreed-upon 90 percent target, it hit 84 percent. However, the group's bonus is tied to making every single one of its targets.

The controversy generated confusion and palpable unease among some council members who characterized the reimbursement as just an indirect form of a bonus that even some city officials, including City Auditor Sharon Erickson and City Attorney Rick Doyle, have said was not deserved.

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"It's common practice to provide a bonus for working that much harder," Campos told his colleagues. "But at the same time, we would be rewarding a contract for non-compliance. To treat this contract any differently, to just put it simply, it's not fair and not right."

But Liccardo and Constant emphasized that the group had outperformed in every area except one that wasn't weighted as heavily as the more important financial measures.

"We were laser-focused on their fiscal and financial goals, and they hit the ball out of the ballpark on those measures," Liccardo told the council.

"One measure that had very little to do with it they fell short on," Liccardo said, adding that was largely because of circumstances outside the group's control, such as the unexpected cancellations of the ballet and symphony groups as well as delays in the renovation of the San Jose Civic. "Now we have a situation where Team San Jose clearly performed above expectations and we want to make sure people are properly rewarded."

The council also voted 10-1, with Councilman Pierluigi Oliverio opposed, to accept the latest annual audit, and change Team San Jose's upcoming management agreement so that performance measures and incentive fees would be awarded for the group's overall score, not tied to individual categories.

In other matters, the council also voted 9-1-1 to file a court brief supporting challenges to California's Proposition 8 banning same-sex marriage -- an issue dozens of members and friends of the local lesbian, gay, bisexual and transgender community had waited all day to testify in support of. The council action had been mobilized by the South Bay AFL-CIO Labor Council and pushed heavily by Councilmen Kalra, Campos, Kansen Chu and Don Rocha.

In a surprise move, Councilman Constant, who has been in favor of Proposition 8, agreed to support the amicus brief. While he said he does not endorse gay marriage, a belief rooted in his Greek Orthodox faith, he said one person's faith and beliefs should not be imposed on others.

South Bay Labor Council chief executive Ben Field was pleasantly surprised by Constant's move.

"We didn't think it would be a close vote, but the size of the majority just goes to show the power of our moral case," said Field.

Only Mayor Chuck Reed, who has consistently said he supports the will of California voters who passed Prop. 8 in 2008, voted against the amicus brief. Councilman Johnny Khamis was absent.

The council also:

Unanimously reappointed Michael Smith to the city's five-member Elections Commission, which enforces city elections and ethics laws, and appointed Chris Peacock to fill a vacancy. Peacock, a 12-year city resident, has managed public policy and communications in the public, corporate and nonprofit sector with recent employers including the Silicon Valley Community Foundation, San Jose Silicon Valley Chamber of Commerce and Kaiser Foundation.

Accepted survey results from city consultants indicating increased public support for a possible sales tax measure. Mayor Reed cautioned that it will take an organized campaign effort to ensure passage of such a tax and urged those who are interested to form a committee and the city to consider the June 2014 ballot. He suggested the city may poll again over the summer. "We have a little more than a year to get something on the June ballot," Reed said. "There's plenty of opportunity to get people engaged."

In other action, the city filed court papers in connection with union-sponsored legal challenges to the Measure B pension reforms seeking a ruling invalidating those claims. The mayor's office said a hearing is expected in late April in Santa Clara County Superior Court, where the consolidated cases are being heard.